A sheep in Woolf clothing at BAE

When retired senior judge Lord Woolf set out, at the behest of BAE, to compile a report into business 'ethics' at the defence giant, it looked from the start like a classic case of missing the elephant in the room.

Lord knows: Woolf says that even a full inquiry might not get at the truth behind the BAE claims.

For a global arms-manufacturer, rocked for years by allegations of corruption and bribery, it was hard to see how a report into ethical practices would be the cure-all for the business's heavily damaged reputation.

Nine months and £1.7m later - the former chief justice was billing BAE at a rate of £6,000 a day - the final report has done little to dispel the view propounded by the early detractors, that the Woolf committee findings would be little more than a glorified PR exercise.

Even if there are several laudable recommendations among the 23 put forward, the project, BAE critics point out, has failed to give the much needed clarity over alleged wrongdoings from the past.

Most seriously, BAE has been accused of paying around £1bn over a decade to Prince Bandar bin Sultan in connection with the Al-Yamamah deal, under which it sold aircraft and equipment to Saudi Arabia. It has denied the claim but the US Department of Justice is still investigating.

The company is also facing unresolved criminal investigations in Washington, Dar es Salaam, Bucharest, Prague, Berne and Budapest among others.

Asked whether a quicker and more efficient way to silence the criticism over the company's conduct would have a been to conduct a full investigation into Al-Yamamah, in the courts or via a full-scale independent review, Lord Woolf said only 'that was not what I was asked to do'.

BAE chairman, Dick Olver, and chief executive Mike Turner, went as far as to admit, during interviews with Woolf, that they had not paid enough attention to ethical standards in the past.

But in light of the ongoing allegations and repeated calls for the Serious Fraud Office to reopen its inquiries into Al-Yamamah, their admission looks like the understatement of the decade.

While BAE (down 7¼p at 467¾p) has always denied any wrongdoing and Woolf was adamant that he found no evidence of corruption at the company, the former chief justice did let slip that he sees the need for a further inquiry to delve into the past.

He said: 'A fully resourced and independent inquiry needs to be carried out', before adding the caveat: 'Even an acute investigation can fail to get results. Look at the Lady Diana investigation. Will we ever get the truth? Will it ever be accepted?'

Lord Woolf further pointed out that it was not the company's fault that the SFO investigation at BAE had been halted.

In December 2006, former prime minister Tony Blair stepped in to block the SFO probe, citing national security issues.

Last month the High Court ruled that the investigation was ended illegally.

Lord Justice Moses said the decision to halt the inquiry represented an 'abject surrender' to pressure from a foreign government.

While recommendations in the report, for BAE to conduct strict due diligence on third-party advisers involved in government deals and to adopt a code of ethical conduct and be subject to an annual, independent ethical audit, may bolster confidence in the firm's business dealings, they seem to miss the point.

Vince Cable, Liberal Democrat Treasury spokesman, heaped opprobrium on the work of the Woolf committee: 'It does nothing to deal with the legacy issues.

'Until those are cleaned up, exercises of this kind will not change perceptions of the company.' The Campaign Against Arms Trade (CAAT) further slammed the Woolf report, saying: 'The committee attempts to distance the company from corruption allegations by stressing how BAE has changed over the past decade.

'However, many of the allegations relate to more recent events and the attitude towards them is worrying since the present chairman and chief executive were in post when BAE lobbied to end the SFO investigation into arms sales to Saudi Arabia.'

In the end you wonder whether Woolf, too, isn't frustrated that the scope of his investigation left him with little opportunity to get at the real issues that continue to dog BAE.